- India, Newsletter
- January 18, 2019
RBI has recently announced a new regulation for all the foreign borrowings, thus permitting all the eligible companies to raise overseas funding under the regular route and remove the existing sectoral curbs. All the entitled borrowers would be now able to raise external commercial borrowings (ECB) up to the maximum limit of $750m per year under the regular route.
The “liberalization or rationalization” in the latest framework ECB and rupee-denominated bonds has been mainly done to simplify the process of doing any business, said the central bank. The RBI said that the Tracks I and II under the current framework have been combined as the ‘Foreign Currency denominated ECB’ and the Track III or the Rupee Denominated Bonds structure has been amalgamated as ‘Rupee Denominated ECB’ to replace the current four-tiered arrangement and the structure has now become instrument-neutral. Here, Track I, II, and III stands for the total amount and maturity of the funds that are raised.
In addition, all-in cost ceiling per year is quoted at ‘benchmark rate plus 450 bps spread’, where 100 basis points are equal to 1 percentage point. The minimum average maturity period (MAMP) is decided at three years, which is applicable for all the ECBs, whatever may be the borrowing amount in lieu of different layers of MAMPs currently, with an exception of the borrowers who are especially allowed in the circular to borrow only for a short period, the RBI norms said.
The list of qualified or eligible borrowers now includes all businesses eligible to get FDI. In addition, all the port trusts, businesses in SEZ, SIDBI, all registered companies involved in micro-finance activities, EXIM Bank, registered trusts, societies, cooperatives, and NGOs could also borrow as per the new framework. But, lending or borrowing as per the ECB framework conducted by Indian banks and their foreign branches would be subject to the prudential regulations, said the RBI.
ECBs are basically commercial loans that are raised by qualified resident organizations from recognized non-resident businesses or organizations and must comply with all the usual parameters like minimum maturity, permissible and not permissible end-uses, and also highest allowed all-in-cost ceiling.
However, there is also a negative list, where the ECB proceeds are not permitted to be utilized, and those include real-estate activities, equity, and capital market investment, purposes of working capital barring foreign equity holder, and repayments of Rupee loans barring foreign equity holder.
- Article, U.A.E
- January 17, 2019
Tax domicile certificate or the tax residency certificate is typically a certificate or official document that is issued by the respective authority for the government entities, companies and individuals who are eligible to enjoy the benefit of agreements of double taxation avoidance on the income and is signed by the UAE.
In case of UAE, this tax residency or the tax domicile certificate is issued by the UAE’s Ministry of Finance of UAE. The certificate can be obtained by a company or business that is registered in the UAE and also by individuals who have acquired the residency visa or they already permanently live in the UAE. This tax residency certificate is typically valid for one year from the date it is issued.
Please note that only onshore UAE companies are eligible to receive a tax residency certificate. Offshore companies that are also called as International Business Companies are not permitted to get such a tax residency or a domicile certificate. But that is different from a tax residency certificate and doesn’t offer the usual advantages of double tax treaties. In case of UAE onshore companies, the tax domicile or residency certificate is a necessary document which allows them to fully take benefit of the wide-ranging network of double tax treaties that the UAE has signed along with so many countries located in various parts of the world.
The main condition for being considered a resident in the UAE is that one has to obtain a residence permit. A foreign individual should have a sponsor as a rule, so as to apply for a residence permit in the UAE. In many cases, the company that employs the expatriates usually acts as their sponsor and gets them their residence visa. The best way for the people, who do not come in the jurisdiction on an employment contract, is to incorporate or set up a company in the UAE.
Establish a corporate structure to act as sponsor
The usual and preferred method of getting residency is by a corporate structure. However, for foreigners, incorporating an FTZ company is the best way of getting sponsorship. This company should necessarily have physical presence in the kingdom and for that the most cost-effective options are suggested by the free zones that are located in the northern emirates with likelihood to have “flexi offices” or “flexi desks”.
Benefits of getting a Tax Domicile Certificate
Tax domicile certificate provides the advantage to fully utilize the benefits of the widespread double tax treaties network that the UAE has signed with various countries in so many parts of the world.
DTAA or double tax treaty (DTT) is actually a bilateral agreement signed between UAE and other nations that uphold the welfare of global investors and businesses from other jurisdictions in an attempt to invest in the UAE. Due to this treaty, any global firm that is already paying taxes overseas for the profits they have earned from the business can also mitigate the possible tax burden in the country.
This not only applies to companies, but also to individuals who are fiscal citizens in the UAE for over 180 days and are able to provide the documents needed by the Ministry of Finance, will be eligible to use the benefits.
Necessary Documents for getting a Tax Domicile Certificate
In case of individuals
- A valid passport copy
- A valid residence copy
- Certified bank statement for a minimum of 6 months during the required year
- Source of income or a salary certificate in case of a job
- Certified tenancy contract or a title deed
- Immigration report of the residency, that is, Exit and Entry report
In case of corporate
- A valid trade license
- A copy of identity card for all the company owners/partners/directors
- Certified articles of establishment; founding; incorporation; institutionalizing or Memorandum of association
- Copy of the residence visa for the company owners/partners/directors
- Copy of valid passport for the company owners/partners/directors
- Certified audited report
- Certified tenancy contract or title deed
- Certified bank statement for a minimum of 6 months during the required year
Need a TRC in the UAE?
We at IMC offer an array of business services to our clients and are especially known for our quick turnaround and reliable services. If you are looking for a Tax Residency Certificate in Dubai or PRO services in Dubai, get in touch with our team of professionals who will assist you according to your specific needs.
- Bahrain, Newsletter
- January 17, 2019
The Bahrain Ministry of Finance or the MoF recently said that the VAT registration will be divided into three phases and launched separately, completely depending on the total value of the annual supplies of various businesses. The three registration phases are as follows:
| Annual Supplies | VAT Registration Deadline | Effective Registration Date |
| Over and above BHD 5 million | 20 Dec 2018 | 1 Jan 2019 |
| Over and above BHD 500,000 but less than BHD 5 million | 20 June 2019 | 1 July 2019 |
| Over and above BHD 37,500 but less than BHD 500,000 | 20 Dec 2019 | 1 Jan 2020 |
This announcement has come after the MoF’s earlier announcement that the VAT registration’s first phase would be restricted to companies who have at least BHD 5 million annual sales.
Businesses which have an annual taxable turnover above the voluntary registration limit of BHD 18,750 could register for VAT but on a voluntary basis.
However, at a meeting conducted by the MoF with tax advisors regarding VAT implementation recently, the MoF has given its confirmation that the VAT regulations would be issued before the end of January. The MoF also provided additional details on the issues such as:
- How frequently can be VAT returns filed;
- How are the VAT groups divided;
- What is the VAT treatment for the supply of buildings, food items, financial services, electricity, oil, gas and imports and also government entities;
- What would be the content and prerequisites for tax invoices; and lastly
- Who will be the tax representatives and agents.
Next steps
Companies should ideally consider the VAT treatment of their business transactions to establish if they are required to go for VAT registration or not. Though postponing the process of VAT registration for some firms would offer additional time to the businesses, the company should decide whether they should go for VAT registration so as to recover the VAT incurred on their procurement or not.
Need professional assistance?
If you are looking for professional VAT consultants in Bahrain who can advice you if you need to register for VAT or not and also need help for getting a VAT impact assessment done or conduct a second review to find out the VAT treatment of your business transactions, do get in touch with us.
Our team of experienced professionals at IMC will help you at every step in case you require any advice or assistance.
- Newsletter, Qatar
- January 17, 2019
Do you know that the $2.2tn worth Indian economy has been growing at more than 7.5 percent? The Indian ambassador, P Kumaran shared the good news that India is now offering many investment opportunities to Qatar. He shared this at a recent annual networking event that was organized by the Qatar Financial Center (QFC) along with the Indian Business and Professional Council (IBPC).
Kumaran also said that India has a nominal gross domestic product of over $2tn (which is over $7tn on purchasing power parity basis) and a growth rate of over 7.5 percent, and it now ranks as one of the most rapidly-growing large economies of the world. India is now opening its doors and offering many opportunities to Qatar with regards to investment options, a highly-trained and educated workforce, and a market showing potential for business alliances.
He also said that the Indian embassy would continue to give its support to the QFC in promoting business and also form new commercial links. Yousuf Mohamed al-Jaida, who is the QFC chief executive, said that Qatar and India have always shared good and stable bilateral ties, and the QFC would continue to play its role in supporting the flourishing Indian business community located in Qatar, which influences further development of these relations.
There are about 24 fully-owned Indian companies based and operating in Qatar as of now. There is a forecasted 6,000 Qatar-India joint ventures functioning in the field of infrastructure, energy sector, ICT, and other areas, and the contribution that the Indian businesses play in the local economy is really huge and irrefutable.
QFC also houses 31 Indian businesses that include Tech Mahindra, a fintech firm named Goals101, and many others. K M Varghese, who is the President of IBPC said that IBPC feels that the QFC should be partnering with them in Qatar to fulfill their aim of attracting more and more Indian businesses and organizations into Qatar by using the very unique QFC platform.
Thinking of setting up your business, opening a branch office or company formation in Qatar? Just get in touch with our professionals and let us assist you in having a hassle-free experience.
- Newsletter, Oman
- January 17, 2019
New doors are opening for more and more investments for the Al Mazunah Free Zone in Oman, which comes under the purview of the Public Establishment for Industrial Estates – Madayn, as various operating projects reached a number of 197 by the end of November 2018, stated Said bin Abdullah Al Balushi, who is the supervisor of business processes in this free zone.
Al Balushi said that Al Mazunah Free Zone has been fortunate to get 46 fresh investment applications with professionals wanting to do company formation in Al Mazunah Free Zone, which are now under the process of review. This free zone has been very instrumental in the establishment of many Small and also Medium Enterprises for the residents in the wilayat of Al Mazyunah. Approximately 14 SMEs were set up in the areas of import and export, shipping and unloading, hospitality, construction, and also in public services. What’s more? The free zone also provided 60 new job opportunities especially for the national cadres in the operating body of this free zone, some investing companies and the developer named Golden Hala Company.
Al Balushi also shared that Madayn is working on various projects as of now, which include developing the free zone in phase one (second package), and in phase two, the aim would be transmitting electricity to the various leased companies such as cables and transformers, and the broadband project.
According to the electronic system taken up by Al Mazunah Free Zone for managing the transfer of exported and imported products, the volume of imported products into the free zone has reached 155,666 tonnes by November 2018. In addition, the total number of imported vehicles, equipment, and machinery added to about 7,739 during this period.
Al Balushi also said that Madayn keeps making continuous efforts for promoting the Al Mazunah Free Zone among various investors by organizing events that focus on the new investment opportunities available in the free zone and how its strategic location contributes to the local and global trade and investment movement.
These efforts have been planned as per Madayn’s vision to further improve Oman’s status as a top regional hub of manufacturing, ICT, entrepreneurship excellence, innovation and its goal to bring in more industrial investments and keep on giving continued support by making locally and internationally competitive strategies, providing stable infrastructure and value-adding services, and simple governmental processes. These efforts also are in line with the Madayn’s key objectives such as luring fresh foreign investments into the Sultanate and localizing the national capital, while continuing to encourage the private sector to attain sustainable financial and social development, accomplishing environmental sustainability, and also contributing to adding new job opportunities for the national cadres.
Al Mazunah Free Zone was set up under Royal Decree no. 103/2005 to function under the administration of the Public Establishment for Industrial Estates. Its strategic location, which is on the border of the Sultanate and Yemen makes it the perfect Gulf gateway for transit trade especially to Yemen and Eastern parts of Africa. The free zone has a goal to bring in more domestic and international investments for enhancing the trade exchange, get more advanced technologies, and open for new job opportunities. Various incentives are given to investors, which include customs’ exemptions, full or 100 percent foreign ownership, no capital requirements at all, and the Omanisation rate at 10 percent.
So if you are planning of company formation in Oman in near future, get in touch with us at IMC and we will be happy to assist you.
- Newsletter, U.A.E
- January 17, 2019
Do you know that the DIFC was the first-ever financial Free Zone in the UAE? It is one of two free zones in the country and is also internationally-known for its world-class facilities and services. The initial set up was done in 2004, and today, it has expanded and developed into one of the most recognizable and successful free zones in the kingdom.
It provides all the benefits of a free zone like 100 percent foreign ownership along with no income or profit tax at all. In addition, DIFC especially caters to all the financial companies and is governed by the Dubai Financial Service Authority (DFSA).
It does not actually rely on the rules and legislation found on the UAE or Dubai mainland, because the DFSA makes provisions that are specific to the particular free zone.
The New Version of the DIFC Companies Law
The new law was announced and enacted by the DIFC President, who also happens to be the Vice President of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum.
The amendments include:
- There are two new company forms that can be established in the DIFC;
- New duties can be added, or changes can be made to the current responsibilities of the directors of companies;
- New ultimate beneficial ownership registration information has been added, which all the companies should provide to the DIFC authorities.
Now, the new company types introduced would actually replace LLCs and share limited companies and are PLC’s, which are typically public companies; LTD’s which are basically private companies; and other recognized company forms like branch companies.
The director duties and roles were not so clear earlier, but now, an expansion of the same has been provided. There are some new responsibilities, which involve the promotion of a company’s achievements, avoiding conflicts of interest, and also applying their knowledge and experience in helping their business to grow.
The general changes though are not on a large scale but aim to work upon the already built foundation provided by the DIFC. The amendments are expected to be received well, especially because it would not require too much effort from current companies and would ensure a more regulated and controlled environment in the free zone.
In case you need to know more about new company regulations, any information about how to set up a company in the free zones, or professional assistance for company formation in Dubai, do get in touch with us and we would be happy to help.
- Newsletter, U.A.E
- January 17, 2019
Compulsory health insurance, some new life rules and enforcement of new regulations will be the top agenda.
Yes, this New Year is going to be a buzzing one for the insurance market in the Middle East and there are three major developments that we can forecast.
The first one is that an obligatory health insurance will continue to be rolled out in the GCC region. Recently, a new law has been announced in Bahrain and Oman which will be implemented in 2019, according to which all the employers need to necessarily offer health insurance to their staff members. However, with compulsory health insurance being a major factor of growth and upsurge in markets like the Kingdom of Saudi Arabia, Abu Dhabi, and Dubai, many others are surely going to follow suit.
Secondly, the UAE is soon going to put into practice the much-awaited Life Insurance Regulations. This step was announced back in 2016 end, but the Insurance Authority needs to still publish and announce the final draft of these regulations before its implementation. These regulations will surely have a very positive effect on the industry. It is also predicted that they will put a cap on the total fee and commission that is to be paid by policyholders, limit the usage of indemnity commission, and execute some obligatory disclosures and Pro-forma product illustrations. In all probability, the regulations would also help in short to a medium-level reduction in the total number of life insurance intermediaries and will further drive more consolidation.
Thirdly, all the regulators in the market will get tougher. In 2018, there were a lot of proactive steps taken by insurance sector regulators, be it in terms of the issuing of new regulations or better level of enforcement. Many official bodies in the KSA and UAE have suspended insurers and other intermediaries from doing business which is pending the investigation process and remediation of several regulatory breaches. It seems that these authorities and regional regulators would continue the same thing in this year too, as the regulators want to push further compliance and augment consumer protection.
- Newsletter, U.A.E
- January 14, 2019
Some new regulations are anticipated to pull in foreign investors and also retain the expats in the Gulf country.
The cabinet of the UAE has started implementing laws like 100 percent foreign ownership and 10-year visas for the expats, entrepreneurs, and investors.
Though the full ownership of companies set up in the Gulf country is limited to only the free zones as of now, this new law is anticipated to bring in new foreign investors who want to establish or take over local companies in the UAE.
This year, new long-term visas will be introduced, which will be granted for up to 10 years to entrepreneurs, investors, and specialists working specifically in fields of medicine, science or research.
In addition, exceptional students would be eligible for getting a long-term visa under the new amendments, so as to motivate them to reside in the UAE after completing their education. The students scoring an average of a minimum of 95 percent grades in school and a grade point average of minimum 3.75 on graduation from the UAE universities and abroad would qualify for getting a five-year visa for themselves and also their families.
All the people looking to invest in the UAE, would be eligible to get a five or 10-year residency visa dependant on how big is their investment. The investor’s spouse, family or children, one executive director and also one adviser would also get long-term visas.
Entrepreneurs and businesses who have had a former business worth at least $136,000 (AED500,000), or those who to get approval of an accredited business incubator in the UAE, would also be given a five-year residency visa. They can also upgrade to an investor visa soon depending on certain pre-set conditions.
The visa would also be offered to the entrepreneur’s spouse, family or children, firm’s or business partners and also to three executive directors.
All the professionals such as doctors, inventors, scientists, specialists in the field of culture and art and the people involved in research in science and knowledge would be given a 10-year visa. The researchers, doctors, and scientists are also permitted to include their spouses and children under their residency visa.
Expatriates who are 55 years of age or above are allowed to live in the UAE after their retirement once they obtain a five-year retirement visa meeting certain pre-set criteria, which includes the ownership of property for a minimum valuation of $545,000 (AED2 million). There are other conditions such as the ownership of a minimum valuation of $272,260 (AED1m) in savings or the person should be having an active income or earning of over $5,445 (AED20,000) every month.
Besides this, a new quota system will be announced in 2019, which guarantees 50 percent of seats reserved especially for women in the Federal National Council (FNC) taking effect during elections. This move means, if there are 40 members in the FNC, there will be 20 women appointments in that for sure.
So if you are looking for DMCC company formation or company setup in Dubai, do get in touch with our team of professionals who will assist you according to your specific needs.
- Newsletter, U.A.E
- January 7, 2019
All the UAE businesses should be prepared for the upcoming tax audits by the Federal Tax Authority (FTA) conducted for checking their resources and how accurately they are keeping their records.
The FTA has started sending e-mails to organizations notifying them that they would be audited within five working days of when they get an e-mail, for the tax periods of January 1, 2018 till April 30, 2018 and May 1, 2018 till July 31, 2018.
Getting through VAT audits could be a challenge for companies who are not prepared and have not been maintaining their tax records in accordance with the FTA guidelines.
The companies have to show that every business expense they have made is legitimate and they must possess proper documents for it. In addition to expenses, every revenue should be properly accounted for and the due tax amount should be paid on time regularly.
The FTA has recently enhanced its attention on VAT compliance for companies and has also announced guidelines to some important issues to clear out the doubts. Some businesses have also requested for tax audits recently, that cover one to two tax periods.
Tourist VAT refund
The UAE has announced its tourist VAT refund scheme – first phase on November 18, which permits the visitors to the country to claim the VAT refund on whatever they buy from the three busiest airports, namely Dubai, Sharjah, and Abu Dhabi when they fly out of the country within a period of 90 days.
Phase two was announced on December 16, being rolled out from the following locations: three airports like Al Ain International Airport, Ras Al Khaimah International Airport, and Al Maktoum International Airport; two sea ports like Port Rashid in Dubai and the Zayed Port in Abu Dhabi; and also four land ports such as Hili Border Port and Al Madheef Border Crossing in Al Ain, Al Ghuwaifat Border Post in Abu Dhabi, and Dubai’s Hatta Border Exit.
The data showed the number of retail outlets that were linked to this refund scheme totaled to 6,903 with almost 3,800 digital transactions being processed every day by December 10.
The UAE is forecasting that revenues will go up to Dh20 billion through VAT in the year 2019. This way, the government will be able to diversity the revenues away from the petrodollars as the falling crude prices encouraged the UAE and some other oil-producing countries to find alternatives due to unstable prices.
But the UAE has now rolled back the announced VAT on investments done in the sector of precious metals like gold, platinum, and silver used in business as per globally-accepted standards having purity levels of 99 percent or more.
This regulation was imposed under the framework that was agreed upon by the GCC states and some verticals in major sectors like healthcare, transport and education got an exemption under the new tax system.
- Newsletter, U.A.E
- January 7, 2019
The New Year has begun with a lot of good news for UAE women and also for all expat investors, businessmen, executives and specialists in the field of science, medicine, or research. A new quota system promises to reserve 50 percent seats for women in the Federal National Council (FNC) this year during the FNC elections. This move will push UAE to the fourth position in the world as per the Inter-Parliamentary Union.
20 out of the 40 FNC members will mandatorily be women
In 2019, more women would be seen on top jobs in the judicial system, diplomatic services and other areas, thus improving gender equality in the workplace. UAE authorities have also taken initiatives to enhance women’s participation in advanced sciences and also give prenatal and postnatal healthcare to all women.
The government will also now permit foreigners to stay in the country even after they retire, from this year onwards. Expats of the age of 55 or above would be eligible to obtain a five-year retirement visa in case they meet the criteria: owning property worth at least Dh2 million, or having a saving of at least Dh1 million, or having an active income of over Dh20,000 per month.
100 percent foreign ownership
Dr. Mohammad Al Khazraji, who is a leading Emirati lawyer, pointed towards the recent Cabinet measures and said that this is a great news for someone who loves working and living in the UAE, but could have struggled to settle somewhere after retirement. This new year will see another announcement for 100 percent foreign ownership of UAE companies, thus making the nation a more attractive destination for investors who want to take over local companies or start their business in the UAE.
Getting new long-term visas
In 2019, businessmen, investors, entrepreneurs and specialists (in the area of medicine, science or research) would be allowed to reside in the country for up to 10 years only on one visa.
Students with outstanding performance and grades would be now eligible for getting a long-term visa; this move will encourage budding professionals to live and work in the UAE for a long term.
Visa upgradation
Those investing in the country can get a five or 10-year residency visa, which depends on the volume of their investment. The investor’s spouse, or family like children, and also one of the executive directors and one adviser would also be eligible to get long-term visa.
Businessmen who have done a project earlier worth at least Dh500,000, or those who obtained approval of a UAE’s accredited business incubator, would get a visa for five years, with an option of upgradation to an investor visa, in case the required conditions are fulfilled.
Outstanding students who have scored at least 95 percent in school and also a grade point average of a minimum of 3.75 while graduating from universities in the UAE and in other nations would be eligible to get a five-year visa.
If you need any assistance or are looking for Dubai residence visa services or PRO services in Dubai, get in touch with us and we would be happy to help.
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